People who invested in their skills as traders and as
machine and transport operators are also losing their jobs.

One result of the drop in demand for certain occupations is
an excess in supply of workers for those jobs, driving pay downward.

This is a key driver of
‘outsourcing’. Organisations find themselves contractually and morally unable
to slash the wages of their own staff, so they outsource all the
unpleasantness. Which, ironically, can also help the organisations claim to be ‘good
employers’, by getting rid of employees they were being ‘bad’ to.

"Turnover levels can vary widely between occupations and industries. The highest levels are typically found in retailing, hotels, catering and leisure, call centres and among other lower paid private sector services groups."

Outsourcers take comfort from this, knowing that even if they do take on people on higher-low-pay from their client, most of these transferred staff will soon leave to be replaced by new workers on low-low-pay. When Barnet
outsourced parking to NSL in May 2012, 70% of the workforce had left within two
years. Barnet pay rates were rapidly migrating to lower NSL pay rates. John Burgess,
Branch Secretary of Barnet Unison, told us:

“When I submitted a London Living Wage claim NSL
told me to go back to the Council. Which was odd. I have and they say they will
not insist the LLW is adopted by contractors. In the same breadth the Leader
said that “workers should have a wage they can live on if they work for us”.
Very clever, because they keep outsourcing services and so it is ok for
contractors delivering public services on behalf of the council to be paid
poverty wages”

Barnet proudly boasts a “Barnet Living Wage”, having excluded those of its staff it handed over to the tender
mercies of the outsourcers. On the London Borough of Barnet website it states:

“The council is implementing a minimum wage rate for
all employees. This will be known as the Barnet Living Wage and is set at £8.80
per hour worked. This is currently the same as the London Living Wage and will
be paid between 1 October 2013 and 31 March 2015. The Council’s minimum wage
rate will then be decided on an annual basis following this initial 18 month
period.“

Another group of former Barnet employees have also been
mugged in this way. Barnet outsourced its care services to The Fremantle Trust (motto "Passionate about Care"). According
to Unison's John Burgess

“Apparently there are still 85 (out 250) workers who
still have ex Barnet council hourly rates and it is these they want to cut.
They also want to extend their working week from 36 to 39 hours a week. As I
said before these workers already took a massive cut five years ago which meant
we had care workers fighting to work 12 hour back to back shifts to make up pay
cuts. There is already a culture where our members are doubling up on care work
with other companies to make up for the cuts. I shudder to think what they will
have to do to cope with this final cut.”

The astonishingly grisly details were delivered to the former London Borough of Barnet (LBB) staff
in a letter from Fremantle dated 23rd January 2014:

A cut of up to 36% to people already on low wages, in order to boost Fremantle's "balances" (Fremantle has Charitable status, and so doesn't make "profit"), will surely
push these staff onto benefits. Whatever you call it, money is diverted from low paid staff into the coffers of Fremantle. With taxpayer funded benefits subsidising Fremantle's low pay policy.

The profiteering outsourcer attitude to public
sector work is not just about cutting staff pay. This was made plain in an exchange at the Commons Public Accounts Committee.

The
Committee put it to the boss of one of the biggest outsourcers, Serco's Alastair Lyons, that his company was making
excessive profits on the contract to tag offenders. He was accused of stashing these ill-gotten gains in a
company in the USA. Margaret Hodge MP, the chair of the committee,
stated that the USA company Serco Geografix's sole client was Serco Ltd to
which it sold tagging hardware at a greatly inflated price:

Q47 Chair: … A Policy Exchange
report—I think it was Policy Exchange—showed that the costs were 60% higher in
the UK than they were in Florida. We will come later to what you did and did
not do for the tagging contract, but for this contract the lack of transparency
led to excess profit. To the taxpayer, that feels like a rip-off….

Q48 Chair: We are talking about the
existing contract and transparency.

Alastair Lyons: If the situation was not
transparent when it was let in 2005, were it to arise now with Serco being run
as it is, it certainly would not happen that such a material part of the
overall arrangement would not be completely transparent to the customer.

Q49 Chair: So what you are really
saying is, “We ripped you off in the past, but we won’t do so in the future.”

Alastair Lyons: I don’t believe that we did
rip the taxpayer off. I think, as I have said, that it was totally transparent.

Q50 Nick Smith: Do you think it was
profiteering, as Mr Pindar said earlier?

Alastair Lyons: I don’t believe it was
profiteering, no.

The Serco boss didn't deny the scheme. He didn't see there was anything to deny. He
simply and appallingly didn't see there was anything wrong with it. An ethical
view common to the private sector that seems to infect many outsourcing
deals.

Cuts will affect many people, but they will not harm
everyone. Many will do very well as the share of income moves away from one
group into the pockets of others. But with even banks making hundreds of customer
facing staff redundant (including Lloyds & Barclays) it's not just blue collar workers and those on low pay being sacrificed in the name of corporate profits and lower taxes. Before you decide to ignore this, remember the words of pastor Martin Niemoller:

First they came for the Socialists, and I
did not speak out--
Because I was not a Socialist.

Then they came for the Trade Unionists, and
I did not speak out--Because I was not a Trade Unionist.

Then they came for the Jews, and I did not
speak out--Because I was not a Jew.

4 comments:

"Barnet UNISON has concluded a ballot of care workers based on a slightly improved “offer” from Your Choice Barnet following the close of negotiations in mid-July. The offer still means our members would lose 8.31% from their wages rather than 9.5%. It still represents a swingeing cut to their wages at a time when other workers up and down the country have rejected a 1% per cent pay rise. On a 73% turnout 90% voted in favour of taking action to reinstate their pay."http://www.barnetunison.me.uk/?q=node/1392

"Care UK, whose former chairman Lord Nash is now a government minister, took over services for people with severe learning disabilities in Doncaster, south Yorkshire, this year, cutting wages of staff who had been on NHS terms by up to 35% while bringing in 100 new workers on £7 an hour."http://www.theguardian.com/society/2014/aug/09/former-nhs-carers-intensify-strike-over-pay

Parliament's Public Accounts Committee criticises government for slow payment of outsourcers, which puts small businesses (with cashflow issues) a disadvantage against big companies (loadsamoney):http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/chair-statement-paying-government-suppliers-on-time/

"

A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:

Small and medium-sized enterprises have a vital role to play in the UK’s economy. Yet Government is not getting the basics right when it comes to promptly paying small and medium-sized enterprises (SMEs), from which it directly buys £4.5 billion of goods and services each year.

It beggars belief that government departments do not record the date when paper invoices, commonly used by SMEs, are first received, and that around a third of SMEs don’t get paid within 30 days by their public sector clients. This is despite government’s claim that it is committed to increasing the role of SMEs in providing public services rather than allowing large companies like Serco and G4S to continue dominating the market, often at the expense of the taxpayers’ interest.

The Cabinet Office, representing the centre of government, should be doing much more to improve current poor practice in departments, which can put SMEs out of business and jeopardises government’s ability to deliver value for taxpayers’ money."